Canadian Manufacturing

Enbridge to transfer $1.76B in pipeline assets to affiliate

Will transfer interests in U.S. segment of Alliance pipeline, Southern Lights diluent pipeline to Enbridge Income Fund



CALGARY—Enbridge Inc. announced a deal this week to transfer $1.76 billion in pipeline assets to one of its affiliates.

The deal with Enbridge Income Fund Holdings Inc. includes its 50 per cent interest in the American segment of the Alliance pipeline, which carries gas from northeastern British Columbia and northwestern Alberta to the Chicago area, as well as the Southern Lights diluent pipeline, which transports the oilsands-thinning agent from the Chicago area to Edmonton.

Enbridge chief financial officer Richard Bird said this latest “drop down” deal will provide a “significant source of low-cost funding for our record growth capital program.”

After the transfer, Enbridge’s overall economic interest in the income fund will be 66.4 per cent, through direct and indirect investments.

“We believe that the acquisition of the U.S. segment of the Alliance pipeline and the cash flows from the Southern Lights pipeline will be a great fit for the fund and is expected to deliver numerous benefits,” said fund president Perry Schuldhaus.

“The assets will substantially scale up and further diversify the fund’s sources of low risk cash flow.”

Last week, the Calgary-based oil and gas firm announced a similar plan with its American affiliate, Enbridge Energy Partners LP, to transfer a 66.7 per cent interest in the American segment of its Alberta Clipper pipeline.

That deal was valued at about US$900 million.

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